Customer complaints show $600 million health startup uBiome has been surprising patients and insurers with bills for years

ubiome thumb 2_1

uBiome has faced complaints over surprise bills and billing mistakes for several years.
The Federal Trade Commission received 28 complaints about uBiome between July 2017 and March 2019, according to records obtained by Business Insider.
The complaints detail instances of surprise bills as high as $3,000 and of bills sent to insurers for tests that weren't delivered.
uBiome sells tests that sequence the microbiome, which is the assortment of bacteria and other microbes that live in our bodies. The company has raised $105 million from investors.
The company's offices were raided by the FBI on April 26, and its cofounders and co-CEOs, Jessica Richman and Zac Apte, have been placed on administrative leave, the company said on Wednesday.
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The FBI last month raided the headquarters of the $600 million Silicon Valley healthcare startup uBiome, reportedly as part of an investigation into questionable billing practices.

Even before the FBI raid, customers had been experiencing billing problems at the startup for more than a year, according to a review of complaints by Business Insider. The complaints, obtained under a Freedom of Information Act request, hadn't been previously reported.

uBiome began as a citizen science project and sought to create a large public database on the microbiome, the rich assortment of bacteria that thrive in our bodies and appear to influence everything from our moods to our risks of certain diseases.

In recent years, however, the company had been significantly enhancing its profile, raising $105 million from investors, collecting thousands of samples, publishing scientific research, and signing research partnerships with major brands such as L'Oréal.

In April, the FBI raided uBiome's headquarters. On the heels of the raid, the company placed cofounders and co-CEOs Jessica Richman and Zachary Apte on administrative leave. John Rakow, the company's general counsel, is acting as the interim CEO.

Complaints reviewed by Business Insider show that uBiome customers were experiencing billing problems for more than a year before the FBI raid. The Federal Trade Commission received 28 complaints about the startup between July 2017 and March 2019, according to records obtained by Business Insider.

Of the 28 complaints sent to the FTC, 22 were related to billing, either cases in which patients got an unexpected bill or instances in which insurers were billed for tests that weren't delivered. Others mention instances in which users didn't get their test results after sending in their samples.

Customers faced unexpected bills of as much as $3,000

Many of the complaints point to instances in which users were told their insurance was approved. Some had signed up under uBiome's pilot program, which told potential test takers in big letters "no cost to you." If the health insurers didn't pay, the people thought they wouldn't be on the hook for the costs. But instead, the people say in the complaints that they were left facing bills of as much as $3,000.

"I ordered a kit and was not disclosed the cost of using the service. Company only stated they will process it through insurance," one complaint says. "My insurance company only covered some of the bill and it left me to pay over $2,000 for testing."

The FTC removed the names and other identifying information of the people who made the complaints before providing them to Business Insider. The agency said it couldn't verify the claims and that it couldn't confirm or deny whether it's investigating uBiome.

A representative of uBiome declined to comment on the FTC complaints. The representative deferred to a previous statement in which uBiome said it would conduct an independent investigation of its billing practices and cooperate with government authorities and health insurers.

One complaint, from April 2018, said that the patient's spouse had mistakenly been billed for the test the patient had taken. In the course of sorting out the mistake, uBiome billed both the patient and the spouse, charging an additional $2,970 for a test that wasn't taken.

One patient complained that his or her insurer had been billed for a test for which the patient never got the result. Another was notified in April 2018 by their insurer that the insurer had overpaid uBiome for a test. The insurer then wanted a refund of more than $600. Others had funds taken directly out of special savings accounts that they had set up to pay for medical services.

uBiome stopped selling 2 of its tests

On Monday, uBiome halted sales of SmartGut and SmartJane, which were tests that had to be ordered by a doctor. The company will still sell its "Explorer" test, which doesn't require a prescription.

The Wall Street Journal, which first reported the FBI raid, reported that the FBI is investigating uBiome's billing practices.

CNBC reported in May that people who used uBiome's testing kits said they were encouraged by the company to take more than one test — sometimes as many as six. In some cases, they were sent multiple tests, CNBC said; in others, the company sent emails encouraging them to order another test.

The idea is that by taking several tests over time, you can get a better picture of how your microbiome is changing.

On its website, uBiome says that the tests are "insurance-reimbursed" and that "uBiome clinical tests are fully or partially covered by most health insurance companies under 'out-of-network' healthcare benefits."

Some health insurers don't cover the tests

Some large insurers don't cover the tests.

In its medical policy, Anthem considers uBiome's tests "investigational and not medically necessary," and Aetna considers the tests "experimental and investigational because their role in clinical management has not been established."

Insurers including Aetna and Cambia Health Solutions' Regence BlueCross BlueShield are looking into the company's billing practices, according to people familiar with the matter.

Want to tell us about your experience with uBiome? Email the authors at lramsey@businessinsider.com and ebrodwin@businessinsider.com.

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